The Dogecoin has tested a key support level of $0.1184. Indicators show that a short-term correction in price is imminent.
Dogecoin [DOGE] is approaching a key support level of $0.1184, having tested it four times since March 19.
This mild price decline comes after a moderate surge in price over the past seven days. Recently, DOGE has not seen any significant changes.
The price has been consolidating near the support area since June 19.
At the time of writing, DOGE is priced at $0.1184, up 1.25% in the past 24 hours and 3.38% in the past 7 days, with a market capitalization of $17.4 billion.
However, trading volume has surged significantly by 25.71%, with $497.7 million worth of DOGE changing hands in the past 24 hours.
The short-term decline in price and long-term surge indicate that DOGE will adjust to the key support level in the short term.
The stochastic RSI is in the overbought zone, indicating that a short-term correction is imminent.
Increased profit-taking pressure
An analysis of the profit and loss balance data by AMBCrypto on IntoTheBlock shows that 75.77% of DOGE addresses are still profitable.
This high profitability rate, coupled with bearish sentiment, has triggered a wave of profit-taking among short-term investors.
Outflow of funds signals potential downside trend
AMBCrypto’s analysis of IntoTheBlock data shows a surge in fund outflows. The significant increase in outflow indicates that investors are moving their DOGE holdings to exchanges.
Given the current market conditions, this increase in fund outflows is significant.
As bears capitalize on their profits, this selling pressure may cause the price of DOGE to drop to the key support level of $0.1184 for the fifth time since March 19.
Liquidity determines the fate of DOGE
In a situation where DOGE is on the edge, AMBCrypto further analyzes the market liquidity at the $0.1184 level to determine its near-term direction.
Coinglass’s liquidation heat map data shows that a drop in price below $0.120 could trigger a chain reaction of liquidations, potentially increasing downward pressure.
At the same time, if bulls defend the support level, DOGE may rebound and test the resistance level of $0.132.
Therefore, Dogecoin is at a crossroads. The relationship between profit-taking pressure and buyer support at $0.1184 is crucial in determining whether DOGE can hold its ground or face further downside.
